Commissioner of Service Tax Vs Navnirman Construction Company (CESTAT Delhi)
CESTAT Delhi held that service tax is not leviable when goods are given on hire along with effective control and possession thereof. Accordingly, demand on hire charges dropped as equipments are given on hire with right of possession and effective control.
Facts- The respondent was registered for providing the construction services for constructing commercial/industrial buildings or civil structures, for providing works contract services, supply of tangible goods services etc. CERA conducted the audit of M/s VSK Infrastructure Private Limited for the period 2010-2011 to 20132014 and it got revealed that M/s VSK Infrastructure had received various services through contractors/sub-contractors service providers. Later, did not charged service tax on the bills/invoices against those services provided. M/s Navnirman Constructions Company, being one of the such contractor was observed to have charged Rs. 68 lakhs during the disputed period from M/s VSK Infrastructure, without charging any service tax.
Thus, show cause was issued alleging short payment of service tax of an amount of Rs. 5,82,06,760/-; For the period 2012-2013, the appellant had availed 60% abatement on works contract services. Hence, was not entitled to avail and utilized Cenvat credit of Rs. 6,180/-. Another show cause notice, as a subsequent follow up was also served upon the appellant proposing the recovery of service tax amounting to Rs. 53,08,119/-.
